By Yoon Ja-young
The country's finance minister discussed with the International Monetary Fund (IMF) chief over how to reveal the government's interventions in the foreign exchange market. The IMF chief said the disclosure won't cause unwanted consequences.
Finance Minister Kim Dong-yeon had a meeting with IMF managing director Christine Lagarde on Thursday at IMF headquarters in Washington, D.C. He is currently visiting the United States to attend the annual IMF and World Bank meetings as well as the G20 finance ministers' meeting.
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According to the finance ministry, Lagarde told Kim that disclosing interventions in the foreign exchange market will help with stabilization of the macroeconomy by enhancing transparency of economic policies while serious side effects aren't likely to follow when considering Korea's foreign exchange and financial markets.
Just like other countries, Korea has been engaged in "smoothing operations" in cases of extreme one-sided movements in the foreign exchange market, and the IMF has been recommending it disclose such interventions. The United States has also been pressuring Korea to reveal records of the interventions, and Kim is scheduled to meet U.S. Treasury Secretary Steven Mnuchin to discuss the issue. The United States kept Korea on its "monitoring list" instead of designating it as a currency manipulator in its latest biannual currency exchange report.
Kim told Lagarde that the government is considering measures to enhance transparency of the market. According to the finance ministry, Kim said Korea will make a final decision, comprehensively taking into account cases of other countries, its foreign exchange market and economic structure and the opinions of specialists. He did not however mention details of the measures at the meeting.
Though disclosure can enhance transparency, there is also concern that Korea can fall prey to speculators in the foreign exchange market if it provides too much information regarding interventions. It may also lead to too-steep strengthening of the Korean won, which will hurt price competitiveness of exporters.
Market watchers expect Korea to follow the agreement by the TPP members, which requires interventions to be disclosed no later than three months after the end of each quarter.
Kim and Lagarde also discussed risks to the global economy including trade conflicts. They agreed the IMF should play a bigger role, according to the finance ministry.
The finance minister also met World Bank chief Jim Yong Kim. The minister asked the World Bank chief to attend the African Development Bank (AfDB) general meeting scheduled for next month in Busan, while the World Bank chief sought Korea's support in bolstering its financial capacity.
The country's finance minister discussed with the International Monetary Fund (IMF) chief over how to reveal the government's interventions in the foreign exchange market. The IMF chief said the disclosure won't cause unwanted consequences.
Finance Minister Kim Dong-yeon had a meeting with IMF managing director Christine Lagarde on Thursday at IMF headquarters in Washington, D.C. He is currently visiting the United States to attend the annual IMF and World Bank meetings as well as the G20 finance ministers' meeting.
According to the finance ministry, Lagarde told Kim that disclosing interventions in the foreign exchange market will help with stabilization of the macroeconomy by enhancing transparency of economic policies while serious side effects aren't likely to follow when considering Korea's foreign exchange and financial markets.
Just like other countries, Korea has been engaged in "smoothing operations" in cases of extreme one-sided movements in the foreign exchange market, and the IMF has been recommending it disclose such interventions. The United States has also been pressuring Korea to reveal records of the interventions, and Kim is scheduled to meet U.S. Treasury Secretary Steven Mnuchin to discuss the issue. The United States kept Korea on its "monitoring list" instead of designating it as a currency manipulator in its latest biannual currency exchange report.
Kim told Lagarde that the government is considering measures to enhance transparency of the market. According to the finance ministry, Kim said Korea will make a final decision, comprehensively taking into account cases of other countries, its foreign exchange market and economic structure and the opinions of specialists. He did not however mention details of the measures at the meeting.
Though disclosure can enhance transparency, there is also concern that Korea can fall prey to speculators in the foreign exchange market if it provides too much information regarding interventions. It may also lead to too-steep strengthening of the Korean won, which will hurt price competitiveness of exporters.
Market watchers expect Korea to follow the agreement by the TPP members, which requires interventions to be disclosed no later than three months after the end of each quarter.
Kim and Lagarde also discussed risks to the global economy including trade conflicts. They agreed the IMF should play a bigger role, according to the finance ministry.
The finance minister also met World Bank chief Jim Yong Kim. The minister asked the World Bank chief to attend the African Development Bank (AfDB) general meeting scheduled for next month in Busan, while the World Bank chief sought Korea's support in bolstering its financial capacity.
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